House Prices Continue ‘Controlled Slowdown’

The month of August has never been a particularly gripping one for house sales in the past, and this has yet again been the case according to Nationwide?s latest figures for last month. A fall of 0.2% makes for a price rise year-on-year of 2.3%, as activity remains stable, with expectations of house prices consistent with a continued controlled slowdown, the August report says. ?House prices increased in eight out of the last twelve months, but the general path of house price inflation continues to be soft,? said Fionnuala Earley, Nationwide?s Group Economist today. ?In spite of a fair deal of bearish comment, the housing market has remained quite resilient this year following last year?s interest rate hikes. Price inflation has slowed gradually, but is still positive, and activity has been creeping up since the end of 2004,? she continued. Therefore the report concludes that the market will continue to cool in a contained fashion, but it will be come time before we can expect prices and activity to return to the growth rates seen in the last two years. ?We can therefore expect a sustained period of un-exiting movements in house prices before consumers? financial balance sheets are restored to comfortable levels,? added Ms Earley.